ALGO Buy Signal In Evolution Mining

Posted on | by Todd

Our ALGO engine triggered a buy signal on Evolution mining into yesterday’s ASX close at $3.13.

The “higher low” price pattern is referenced to the intra-day low posted at $3.07 on May 21st.

In general, the junior mining stocks have been performing well even as the price of spot gold has traded lower. We expect a turnaround in the spot price would give the mining stocks a lift.

EVN has now been added to our ASX Top 100 Model portfolio. We see good chart support at $3.00 and initial resistance near the $3.60 area.

Evolution Mining

ALGO Buy Signal For Charter Hall

Posted on | by Todd

Our ALGO engine triggered a buy signal on Charter Hall into the ASX close at $4.21.

This “higher low” chart pattern is referenced to the low of $4.06 posted on May 21st.

CLW is an Australian REIT, and a the current price is on a 6.5% dividend yield.

We see strong price support in the $4.00 area and initial resistance near $4.45.

Charter Hall

FMG Is A Buy Write Strategy

Posted on | by Leon Hinde

FMG is oversold relative to BHP and RIO.

Strong production numbers and improving low grade ore pricing discounts should flow through to better near-term share price performance.

We recommend adding a covered call option to enhance the cash flow.

The graph below displays the increase in Ore shipment from the Port Hedland port in WA.

FMG

 

Ramsay Shares Slide After Failed Takeover Bid

Posted on | by Todd

Shares of Ramsay Heath care are down over 2% to $53.30 in early trade.

Last Friday, the private hospital group announced an unsolicited offer for almost a $1 billion to take over Capio AB, a European healthcare company.

Over the weekend, the Capio board unanimously rejected the deal.

Over the last 2 months, the RHC share price has dropped over 16%. Most of this negative sentiment is based on the company’s admission that earnings growth will contract from 8% to 5% over the next year.

At current prices, we see RHC on a 2.9% dividend yield. As such, we consider the stock near fair value and would look to acquire it at lower levels.

Ramsay Health Care

RIO – Likely To Boost Share Buyback Scheme

Posted on | by Leon Hinde

Our Algo engine generated a buy signal recently in RIO at $80.00 and the stock remains in our ASX50 model portfolio.

In the next 12 months, RIO will generate over $10 billion in free cash flow on top of the $7 billion+ from asset disposals. We anticipate the excess funds will be returned to shareholders though an increased share buyback program.

Of the existing $2.9b buyback, RIO has now completed $1.7b.

FY19 revenue $38b, EBIT $13b supporting a  forward dividend yield of 5.6%.

RIO has their June quarter production numbers out tomorrow.

Rio Tinto

 

 

 

Origin Energy – The “Higher Low” Pattern Continues

Posted on | by Leon Hinde

The uptrend in the Origin share price is well established and the stock now trades near full value.

We continue our buy-side interest, although we recognize a period of consolidation over the next 6 months is likely.

At the upcoming earnings result, we’ll be looking for commentary from the company on reinstating dividends and progress on the debt reduction program.

Origin is a recommended buy-write strategy within the ASX Top 50 model portfolio.

Consensus earnings forecasts are looking for 23% EPS growth supported by higher energy prices and ramp up of LNG revenue.

 

Woolworths Investor Update

Posted on | by Leon Hinde

Whilst the grocery industry’s profitability is improving, (as the industry becomes more rational), we’re cautious on Woolworths’ share price due to valuation concerns.

Industry analysis shows Woolworths sales momentum is slowing. With the stock now trading 23 x consensus FY19 earnings, on a forward yield of 3.3%, there seems little margin for disappointment.

We continue to track Woolworths for a new “higher low” formation, at which point the stock will be added into the ASX 50 model at a discount to the current trading range.

 

 

ALGO Buy Signal For Sydney Airport

Posted on | by Todd

Our ALGO engine triggered a buy signal for Sydney Airport into yesterday’s ASX close at $7.05.

The “higher low” chart formation is referenced to the $6.90 intra-day low posted on May 17th.

SYD has now been added to our ASX Top 50 Model portfolio.

As a medium-term strategy for investors, we are looking to buy SYD shares at current levels and sell the $7.25 Calls into March.

The option is current priced at 30 cents and SYD will go ex-dividend for 18 cents in late December. As such, this Buy/Write strategy would add 48 cents of value into client portfolios.

Sydney Airport